UPSC CDS (Combined Defence Services) General Knowledge: Economics and Current Affairs (Paper II) Syllabus

General Knowledge: Economics and Current Affairs (Paper II) syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for General Knowledge: Economics and Current Affairs (Paper II) in UPSC CDS (Combined Defence Services), not a summary of it.

1. 1

   Indian Economy

   5 topics

   • National Income and Economic Growth
   • Planning, NITI Aayog and Five-Year Plans
   • Money, Banking and the Reserve Bank of India
   • Budget, Taxation and Fiscal Policy
     • Direct and indirect taxes including GST
     • Government expenditure and deficits
   • Poverty, Unemployment and Inflation
2. 2

   International and Sectoral Economy

   4 topics

   • Foreign Trade and Balance of Payments
   • International Economic Institutions
   • Agriculture, Industry and Services Sectors
   • Economic Reforms and Liberalisation
3. 3

   Current Affairs: National and International

   5 topics

   • Important Government Schemes and Policies
   • International Relations and Summits
   • Awards, Honours and Important Personalities
   • Sports Events and Achievements
   • Books, Authors and Cultural Events
4. 4

   Defence and Security Affairs

   4 topics

   • Structure of Indian Armed Forces
     • Army, Navy and Air Force commands
     • Ranks and insignia
   • Defence Exercises and Operations
   • Indigenous Weapons, Missiles and Systems
   • Gallantry Awards and Military History

General Knowledge: Economics and Current Affairs (Paper II) flashcards for UPSC CDS (Combined Defence Services)

20 of 50 cards from the General Knowledge: Economics and Current Affairs (Paper II) deck — real questions with worked answers.

1. What is the difference between GDP and GNP?

   GDP (Gross Domestic Product) is the value of all goods and services produced within a country's domestic territory. GNP = GDP + Net Factor Income from Abroad (income earned by residents abroad minus income earned by foreigners domestically).

2. How is National Income (NNP at factor cost) derived from GNP?

   NNP at factor cost (National Income) = GNP at market price - Depreciation - Net Indirect Taxes (Indirect Taxes - Subsidies).

3. What is the difference between Nominal GDP and Real GDP?

   Nominal GDP is measured at current market prices, while Real GDP is measured at constant (base-year) prices, removing the effect of inflation. Real GDP reflects actual growth in output.

4. What is the GDP Deflator?

   GDP Deflator = (Nominal GDP / Real GDP) x 100. It measures the overall price level of all goods and services in the economy and is a broad measure of inflation.

5. Which organization computes India's National Income estimates, and what is the current base year?

   The National Statistical Office (NSO), under the Ministry of Statistics and Programme Implementation (MoSPI), computes National Income. The current base year is 2011-12.

6. What are the three methods of measuring National Income?

   The Product (Value Added) Method, the Income Method, and the Expenditure Method. In theory all three yield the same national income value.

7. When was the Planning Commission replaced by NITI Aayog, and what does NITI stand for?

   NITI Aayog replaced the Planning Commission on 1 January 2015. NITI stands for National Institution for Transforming India.

8. Who is the Chairperson of NITI Aayog, and who heads its day-to-day functioning?

   The Prime Minister is the ex-officio Chairperson of NITI Aayog. A Vice-Chairperson and a CEO head its functioning; it also has a Governing Council of all Chief Ministers and Lt. Governors.

9. How does NITI Aayog differ from the erstwhile Planning Commission?

   NITI Aayog is a think-tank that promotes cooperative federalism and bottom-up planning; it has no power to allocate funds. The Planning Commission allocated funds to states and followed top-down central planning.

10. When did India launch its First Five-Year Plan and on which economic model was it based?

    The First Five-Year Plan (1951-56) was based on the Harrod-Domar model and focused on agriculture and irrigation.

11. On which model was the Second Five-Year Plan based and what was its focus?

    The Second Five-Year Plan (1956-61) was based on the Mahalanobis model and focused on rapid industrialization, especially heavy and basic industries.

12. Which Five-Year Plan was India's last, and when did the era of Five-Year Plans formally end?

    The Twelfth Five-Year Plan (2012-17) was the last. The era of Five-Year Plans ended on 31 March 2017, replaced by NITI Aayog's strategy documents (e.g., the three-year action agenda, seven-year strategy, fifteen-year vision).

13. What are the four traditional functions of money?

    Medium of exchange, measure of value (unit of account), store of value, and standard of deferred payment.

14. What do the monetary aggregates M1, M2, M3 and M4 represent in India?

    M1 = Currency with public + demand deposits + other deposits with RBI (narrow money). M2 = M1 + savings deposits with post offices. M3 = M1 + time deposits with banks (broad money). M4 = M3 + all post office deposits.

15. When was the Reserve Bank of India established and when was it nationalized?

    The RBI was established on 1 April 1935 under the RBI Act 1934, and was nationalized on 1 January 1949.

16. What is the difference between CRR and SLR?

    CRR (Cash Reserve Ratio) is the percentage of a bank's net demand and time liabilities kept as cash with the RBI. SLR (Statutory Liquidity Ratio) is the percentage that banks must maintain in liquid assets like cash, gold, and government securities with themselves.

17. What is the difference between the Repo Rate and the Reverse Repo Rate?

    Repo Rate is the rate at which the RBI lends short-term funds to commercial banks against securities. Reverse Repo Rate is the rate at which the RBI borrows from banks (absorbs liquidity). Repo is always higher than reverse repo.

18. What is the Monetary Policy Committee (MPC) and what is its inflation target?

    The MPC is a 6-member committee (3 RBI + 3 government-nominated) constituted under the RBI Act that sets the repo rate. It targets CPI inflation of 4% with a tolerance band of +/- 2% (i.e., 2% to 6%).

19. What is the difference between a fiscal deficit and a revenue deficit?

    Fiscal Deficit = Total Expenditure - Total Receipts (excluding borrowings); it shows total government borrowing needs. Revenue Deficit = Revenue Expenditure - Revenue Receipts; it shows that the government's running expenses exceed its current income.

20. What is the Primary Deficit?

    Primary Deficit = Fiscal Deficit - Interest Payments. It shows the government's borrowing requirement excluding interest obligations, indicating the current year's fiscal stance.

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